Striking the Right Balance

When you’re frugal and you save and invest in order to get yourself free from both debt and from the obligation of having to give of your time to others – it’s sometimes difficult to know when to stop.

This is a common trait you often observe on older people who have had to be very careful with their money in their earlier lives – but who then seem unable to switch off the frugality long after the real need has passed.

It makes no sense and the excuse is often that they fear becoming ill and having big medical bills etc., or that they’re keen to leave their families a decent legacy. But their younger selves would probably have scorned such attitudes recognizing them for what they are – indicative of an unhealthy obsession with saving.

What’s more; the “excuse” for the continuance of frugality is often to provide for their offspring, but giving someone all the money they will ever need so often backfires on the recipient as the need to carve out one’s own path in life is removed.

This is a sad state of affairs and often people have simply gone on too long in this way to be able to change. But try not to let yourself fall into this trap.

Obviously, we all need to make reasonable provision for our dotage – but there’s a balance to strike between what is reasonable and what is simply a psychological fixation.

If you’re a saver, an investor and/or a trader, you probably feel this dichotomy inside already. Often, the really small amounts can seem to take on equal significance to larger sums even though there is no real sense to this.

If you recognize yourself in this kind of profile – then it’s vital to act whilst you’re still young and open-minded, before it becomes something you simply cannot change.

None of this is new. People have banging on about this kind of thing for millennia. The philosopher Rousseau observed that “the money you have gives you freedom; the money you pursue enslaves you.” The problem, sometimes, is that the pursuit doesn’t stop when the freedom is there for the taking.

Similarly, George Bernard Shaw once said: “…let the fear of poverty govern your life and your reward will be that you will eat, but you will not live.” Very true, but for people who have suffered real hardship, it’s not easy to let go.

So to avoid falling into the same trap, seek wise counsel from friends, or maybe write yourself a letter to open 10, 20 ,30 years from now of things you really want to do before you expire, for which a large amount of cash is needed.

Ramona is a freelance coach who helps people work from home and a personal finance author. When she's not working with her web design clients or her students, you'll find her playing with her 2 year old daughter.

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I am not a financial consultant, but have been passionate about everything finance for years. I hope all these tips will help you in your pursuit to reaching financial independence.